Expert: Dick Dennis - 8/7/2009

Question
I opened my mail a few days ago to find a notice from the county that my house will be sold for a lien on past due property taxes. The taxes came from the year immediately before my purchase of the home. This was the very first notice that I had that there was any problem with my taxes. I am the kind of person who pays every bill immediately; I have never been late for any payment ever.
That this was the first notice I had of this situation is another question for another day.  My immediate problem is where the $  that was collected at settlement as I bought the property went. My  loan officers at Coldwell Banker tells me that they “…will not send in writing, can not send in writing a letter to me that explains what the funds collected on  line 1004 on the HUDc.rpt was collected for.. .My title insurance  co tells me that this $ was collected to pay the taxes from the past 7 months prior to my purchase.  My subsequent mortgage payments included escrow funds for the next due taxes (November).
Each of the two companies blames the other, and the bank (one employee)  has actually said that the title company person is a liar.
At the moment I do not have the cash at hand to pay the previous owner’s taxes. The property will go for the lien!!!!!!   The agent at the title company has told me that she will pay out of her own pocket (because of my dire circumstances) the tax bill and the penalty, even though the evidence is that the mortgage had collected the funds for the tax bill at the settlement.
So the question: if line 1004  on the HUD form (March) records: “County Property Taxes 7 months…”   and my mortgage bills  from April on included escrow payments for the taxes due in November were collected, what is the  line 1004 money for? It is the EXACT amount of the original ’06 tax bill for the former owner.   Now, of course, there are interest charges on the bill, and the notice from the county tells me that I have to pay it by the end of this month (August).
What can I do? What should I do?


Answer
First of all, Renee, you do not want to lose your home to a tax lien. So, you must pay it yourself and be sure to keep all receipts of all charges and costs. Then you are going to sue the Title Company in Small Claims Court as long as the tax amount is less than $7,500. You should also sue Coldwell Banker for not protecting you from this mess. You should also sue your lender of your loan on your home because they should have also protected you from the mess.

You did not say in what state you are located. So, if you are in a state in which an attorney handles the closing, then you have to sue the attorney as well. If your transaction was handled by the Title Company, then you will be suing them. You should send a letter of demand for payment of those taxes to the Title Company, Coldwell Banker and anybody else who was involved in the closing of the transaction. Be sure to state the amount to be paid, plus any costs or charges you may hae incurred. Be sure it is sent certified, signature required. If you are not sure what you should be doing after this bit of advice, I recommend you talk with a REAL ESTATE attorney. He/she will know exactly what should be done in your state.

Since you do not have the money to pay the taxes, if it was me, this is what I would do: I would send a letter to everyone as stated above simply saying that you are NOT going to pay those taxes. And if you should lose the residence because of the tax sale, you will hire an attorney who would be tickled to take this case. And they will know they will be on the hook for a lot more than what the taxes are. I do wish you well.

Dick Dennis
dixiedee13@aol.com